Allied Charities of Minnesota

ACM Update

05 Jan 2021 07:47 | Rachel Jenner (Administrator)

Members,

It is being reported that Governor Walz will announce loosening of restrictions on indoor dining tomorrow, Wed. January 6, at a 2 pm news conference. No other details are currently available.

The GCB issued their FY20 annual report in November of 2020. In December they issued the individual organization numbers that can be seen under the Reports and Legislation tab on their website. That is the report that I use to do a deeper dive into the numbers. 

Using the numbers in the report of all organizations, I found the following:

Payout across all organizations averaged 84.9%. Highest was 90.5%. 359 organizations (31.8% of us) were 85% or higher.

As a group we got 3 cents to the bottom line for missions for every dollar wagered, which is a decrease of over 16% from FY19. In the past two fiscal years we have lost 22% of our ability to serve on a per dollar wagered basis.

The average cost of doing business was 12.1 cents on every dollar sold. 

We had 34 orgs (3% of us) that lost money on every sale. I'm sure that there were some extenuating circumstances, but that is still hard to wrap your arms around.

We had 66 organizations (5.8% of us) make less than 1 cent per dollar wagered.

We had 168 organizations (15% of us) make less than 2 cents per dollar wagered.

We had 367 organizations (32% of us) make less than 3 cents per dollar wagered.

We had 344 organizations (30% of us) pay more in taxes/fees than they had for their missions.

We cannot afford to keep losing ground in our ability to serve those in need. Those in need are our constituents, they are who we need to fight to protect. We need to be their voice.

Over the past several years ACM has offered several options that we believed would have helped increase our ability to serve those in need.

Tax relief has been at the top of that list and ACM members have supported that goal. Despite the best efforts of those legislators that support us, the legislature as a whole has not seen fit to change our tax structure. In the 2021 legislative session we will again be working to affect change in the current tax code, but given the economic circumstances that we as a state currently face, this is a tall climb.

ACM has previously offered up the ideas of capping the 15% and 20% bar options (as the 10% booth option is), capping the electronic tab revenue share (as linked electronic bingo revenue share is) and lowering the payout maximum. All of these options were deemed by members and our for profit industry associates as being too controversial and divisive. None were moved forward for legislative consideration.

ACM has been hearing from numerous member organizations that would like to offer multiple electronic systems in their sites, but have been told by the bar/distributor/manufacturer that it is not an option. 

Until a few years ago, manufacturers were required by statute to sell all of their products to all distributors in the state.  This “sell to all” law was designed to foster competition.  The only exception was for certain games (usually paper pull tab games) sold on an exclusive basis to a single distributor.  But after electronic bingo and pull tabs were permitted, the statute was changed to create another exception for electronic systems and software.   This change gave an electronic manufacturer the ability to choose who they will and will not sell to. It allows a manufacturer to sell to only one distributor. It also allows a manufacturer to refuse to sell to a distributor, including if a distributor attempts to sell a competing electronic product.  The argument for exempting electronic systems and software from the “sell to all” law was that proprietary information might be passed from distributors to competing manufacturers. Today, each of the electronic manufacturers licensed in Minnesota sells to multiple distributors, making the exemption no longer relevant.  In the past eight and a half years that electronics have been available, I am not aware of any case where proprietary information was stolen or misused by a distributor or licensed organization. 

We have always said that the consumer will be the ultimate decision maker of who wins or loses in the charitable gambling market. That means that multiple providers need to have unhindered access to the market. Today that is not happening. 

ACM will be offering legislation that will eliminate the exception in the “sell to all” statute for electronic equipment and software.  If passed, the law will require electronic manufacturers to sell to every licensed distributor (and therefore organization) regardless of whether or not a competing system exists in a site. The decision of what games to offer is best left to the charity and must not be given to anyone else. As soon as we have the language and bill numbers we will pass those along. We will need your support to make the change.

If you have other ideas on what we could do to reverse our current downward trend, please share them with us.

FYI, New MN Minimum Wage, Jan 1 The following are Minnesota's new minimum-wage rates as of Jan. 1, 2021. ·  Large employers must pay at least $10.08 an hour when the employer's annual gross revenues are $500,000 or more.·  Small employers must pay at least $8.21 an hour when the employer's annual gross revenues are less than $500,000.·  The training wage rate, $8.21 an hour, may be paid to employees younger than 20 years of age for the first 90 consecutive days of employment.·  The youth wage rate, $8.21 an hour, may be paid to employees younger than 18 years of age. Employers can print or order a free copy of the required minimum wage poster by visiting the   Minnesota Department of Labor and Industry's website .

Regards,

Al Lund


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